British buyout group Melrose agrees to buy German gas-and-electric meter company Elster Group (ELT) for $2.3B. The offer of $20.50 for each Elster American depositary share is a 43% premium to the stock's average price in the last six months. (PR)
Quanta (PWR +.08%), Echelon (ELON -0.9%) and EnerNOC (ENOC +11.5%) are all potential takeout candidates in the smart grid space, says Piper Jaffray, after Elster (ELT +15.2%) confirmed it's in talks with Melrose to be bought for $20.50 per share. Piper notes Melrose's current bid is below recent smart grid takeout multiples, but in-line with its $21 price target for Elster.
Smart meter hardware/software vendor Itron (ITRI +3.9%) rallies amidst news German rival Elster (ELT +14.9%) is in talks to be acquired by P-E firm Melrose for $2.3B. Jefferies thinks Itron, which currently trades at $39, would be worth $55 or more if afforded the same multiples Melrose is giving to Elster. However, it notes Elster has more exposure to the fast-growing gas metering market.
German gas- and electric-meter company Elster Group (ELT), majority owned by investment firm CVC Capital, is on the auction block and could fetch more than $2B, WSJ reports, citing Siemens (SI) and ABB as potential suitors.
Elster Group (ELT) catches the eye of Piper Jaffray as it initiates coverage with an Overweight rating and lush $21 price target on shares. Analysts with the firm note that with growth in natural gas in the U.S. strong, the energy concern stands well-positioned in the sector to take advantage of infrastructure investment and buildout.